The pre-merger First Tech Federal Credit Union's commercial delinquency rate was zero from at least March 2022 to June 2024, but the San Jose, Calif.'s commercial delinquency rate rose quickly to peak at nearly 9% in September 2025.
It ended the year at 6.23% of its $1.48 billion in commercial loans, according to NCUA data drawn from Callahan's Peer Suite.
Its Jan. 1 acquisition by Massachusetts's Digital Federal Credit Union diluted its delinquencies, lowering the commercial rate to 3%.
The old First Tech was one of seven credit unions that accounted for 22% of 60-day-plus commercial delinquencies in the fourth quarter.
First Tech's charge-offs had been zero until the second quarter, when it wrote off $20.6 million in commercial loans, a net charge-off rate of 5.64%. It recorded a slight recovery in the third quarter, and no charge-offs in the fourth quarter.
Christopher Lewis, First Tech's vice president of commercial lending, said a small number of large commercial loans have driven the recent delinquencies.
"These loans were sound at origination with several properties later experiencing significant tenant or occupancy losses that impacted their performance. We have strong protections in place, including properties being well-collateralized and personal guarantees," he said. "We've further reinforced our underwriting by placing greater emphasis on borrower leverage, portfolio and property concentration, and by placing less weight on high net worth."
And, of course, all of the numbers were for the old First Tech ($16.45 billion in assets, 709,298 members on Dec. 31). Digital Federal Credit Union of Marlborough, Mass., had $13.1 billion in assets and 1.1 million members on Dec. 31, the day before it completed its acquisition of old First Tech.
The new, merged credit union, which is operating under the First Tech name, now has $29.5 billion in assets and 1.9 million members. Had the merger been completed Dec. 31, it would have ranked as the fourth-largest credit union just ahead of the Seattle area's BECU ($29.4 billion in assets, 1.6 million members).
The merger did wonders for First Tech's commercial delinquency rate, cutting it in half to 3% (Digital's was near zero).
Digital was no piker in commercial lending: It held $1.58 billion Dec. 31, accounting for nearly 15% of its total loans, compared with 12% at old First Tech.
The new First Tech started the year with $3.05 billion, accounting for just over 13% of total loans. Its 3% commercial delinquency rate compares with 1.04% for its other loans.
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
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